SALT LAKE CITY – Consumer spending increased faster in Utah in 2012 than in all but three other states, according to a federal report issued Thursday.
Personal spending by Utah residents increased 4 percent from 2011 to 2012, trailing only North Dakota, Texas and Oklahoma, according to the U.S. Commerce Department report which, for the first time, gives data broken down by state. Nationally, spending increased 3.3 percent.
Utah residents spent an average of about $30,200 in 2012 — up from nearly $28,000 in 2009 when spending dipped during the Great Recession. The national average in 2012 was $35,500.
Since the decrease in 2009, spending steadily rose the next three years.
The report is another illustration of the state's strong economy, said state officials and an economist.
Utah's unemployment rate of 3.5 percent is well below the national rate of 6.1 percent, and the state's jobless rate has been inching lower as the state has recovered from the economic recession, when unemployment peaked at 8.4 percent.
"They've heard the reports of how good the economy is here, they see their neighbors getting jobs, they have jobs themselves," said Val Hale, the new director of the Governor's Office of Economic Development. "And therefore, they are more willing to spend more money and buy appliances and things."
The more people have jobs, and the better the wages, the faster people recover psychologically and begin opening their wallets again for big ticket items, said Pam Perlich, senior research economist with the bureau of economic and business at the University to Utah.
"People are finding more comfort in what they are seeing," Perlich said. "There's that added level of confidence. There's been some pent up demand and people are feeling more confident to switch back to a lifestyle where they can buy some luxuries.
Hale said it helped that state officials didn't raise the corporate or personal income tax rates and maintained the fundamental structure that worked in the past.
One of the most important factors has been that Utah's economy doesn't rely on one sector, Perlich and Hale said. Since the 1970s, the state's economy has evolved from one that used to be rely heavily on mining, energy, manufacturing and federal defense employment, to one that is spread across myriad industries that now include technology and tourism.
"If one sector declines, it's not catastrophic," Hale said.